Friday June 14, 2019
1. All eyes on China as economy teeters
- The story of global commodity demand is a story about China. China imported more than $500 billion worth of commodities last year.
- The potential slowdown of the Chinese economy has weighed on commodity prices. Imports of both copper and crude oil declined sharply in May.
- However, the Chinese government’s stimulus measures holds out hope of keeping growth going.
- The Shanghai Composite rallied at the start of the week. “The Bank of China came out with some measures for stimulus and therefore some of the more cyclical stocks are bouncing off oversold levels,” Will James, senior investment director for European equities at Aberdeen Standard Investments, told Reuters.
- Iron ore prices shot up. “Prices are being boosted by the expectation that the stimulus measures recently announced in infrastructure will also contribute to increased iron ore demand,” Commerzbank wrote in a note.
- However, the effort may not overcome the brewing economic slowdown, which may only grow worse if the trade war remains unresolved.
2. GE’s bad bet on gas
- GE (NYSE: GE) lost roughly 74 percent of its market share between 2016 and 2018, seeing $193 billion go up in smoke, according to the Institute for Economic Economics and Financial Analysis (IEEFA).
- IEEFA says that GE is a “case study in how rapidly and unexpectedly…